The hidden economy is closely linked to corruption. Empirical studies show that they fuel each other – a one-point rise in the index of corruption is associated with an increase in the level of hidden economy (in percent of GDP) by 0.253% points. The current policy brief underlines that the COVID-19 pandemic created further opportunities for abuses of labour rights and short-term financial support schemes. The post-pandemic recovery of 2021 was quickly dampened, by rising energy and food prices and the war in Ukraine. As a result, there are considerable risks for backsliding in key governance reforms, despite the adoption of new strategies, programmes and measures aimed at tackling different forms of informality after 2020.
According to SELDI’s Hidden Economy Monitoring System, the prevalence of hidden practices continues to be high in the region. The 2022 Hidden Employment Index for the six Western Balkan countries ranges between 36% (in Montenegro) and 76% (in Kosovo*). Compared to the 2019 values, the situation improved in Kosovo*, Albania, Serbia and Montenegro, while a notable backslide is observed in Bosnia and Herzegovina, and in North Macedonia. Governments in the region have undertaken a lot of different measures to tackle informality, ranging from dedicated initiatives to more general structural reforms within the framework of EU accession. Yet, the lack of unequivocal long-term political commitment to EU accession and related reforms across the region, makes sustainable progress on informality difficult.
Responsible public administration as the basis of well-functioning state
A two-day conference on public administration reform (PAR), institutional integrity, accountability, and public trust in institutions was held in Tirana on the 7th and 8th of June, bringing together government officials and civil society from across the Western Balkans.
The conference was opened by Oriana Arapi, General Director, Prime Ministry of Albania, Florian Hauser, DG Near, European Commission, Gregor Virant, Head of Program, SIGMA – OECD, and Keida Meta from the Department of Public Administration.
“Governments need to have good people who work in civil service, and they need to make sure that the career of the civil servant is attractive to people,” said Florian Hauser. “If we don’t deliver, if we don’t provide services to citizens and businesses, then we are not relevant anymore. Better public administration works – the country will be more successful”, he added.
Keida Meta highlighted that the digitalisation of services was the top priority of the Albanian government and that they achieved good things here.
Members of civil society reminded the government that without the meaningful participation of civil society (in monitoring, coordination, etc.) there is no good public administration.
The participants then talked about the danger of public administration reform being associated with EU integration and agreed that it is dangerous because that means that reforms happen only because of the EU, but the reforms should be domestically driven and why the sectoral mainstreaming of PAR is of utmost importance.
The second day of the conference was opened by Gjergji Vurmo, Programme Director, IDM, Albania, Adea Pirdeni, Deputy Minister of Justice, Albania, Matilda Shabani, General Director, Ministry of Health and Social Protection, Albania and Petra Burcher, DCM, Head of Development Cooperation, Embassy of Sweden, Albania.
Participants then shared experiences from the implementation of the Integrity Risk Assessment methodology in the central public institutions of Albania, why it is necessary to have a code of ethics in public institutions and why we have to pay attention to administrative leadership, not only to political leadership. Also, representatives from the region talked about their own perspectives on integrity-building experiences in the public administrations of the Western Balkans.
Adea Pirdeni said how the government, by enabling the digitalisation of public services, managed to eliminate corruption on the counters, while Petra Burcher highlighted that integrity builds trust and trust is the core of a well-functioning state.
“Integrity as a concept is not only the integrity of institutions. One of the main reasons for bad implementation is connected to a lack of individual integrity. If we put efforts into this part of integrity, there is more chance to improve institutional integrity”, said Emsad Dizdarević from Transparency International.
This video is produced within the WeBER 2.0 project. WeBER 2.0 project – Western Balkan Civil Society Empowerment for a Reformed Public Administration – is dedicated to strengthening participatory democracy through greater involvement of civil society in policy development and implementation of public administration reform in the Western Balkans. WeBER in Montenegro is lead by Institute Alternative and at regional level it consists of partners from Think for Europe Network, with the support of European Policy Centre (EPC) from Brussels.
Montenegro is close to receiving the closing benchmarks for chapters 23 and 24, Dritan Abazović said last week during the Prime Minister’s question time in the Assembly of Montenegro. Recently, in Brussels, he claimed that this can be done by the end of this year.
“I am sure that there is great optimism for Montenegro to use this moment in the best way possible and to distinguish itself from other countries that want to become a part of the European Union”, Abazović said in the parliament on 27 May.
Since the start of the war in Ukraine, multiple officials from both the EU and the region urged for the acceleration of the accession process of the Western Balkans, arguing that it is in the geopolitical interest of the EU to do so. These prospects remain uncertain. Nevertheless, with the lack of bilateral disputes and a full foreign policy alignment with the EU, Montenegro might be the easiest place to start with a renewed enlargement momentum.
This is certainly what the new Government in Podgorica is hoping for. The main justification Abazović’s United Reform Action (URA) offered for its vote of no confidence against the Government of Zdravko Krivokapić in February was the stalling of the country’s EU integration process.
In October last year, European Commission assessed that there had been limited progress in Chapter 23, which covers the independence of the judiciary, the fight against corruption and human rights, and some progress in Chapter 24, which tackles the fight against organised crime and freedom of movement.
These two chapters are crucial for the pace of the entire accession process. Only after a candidate country receives the closing benchmarks – a final set of criteria it needs to meet in these areas – for these two chapters, will it be able to close other negotiating chapters and complete its accession process.
Montenegro has opened all negotiating chapters, which means that further progress of its entire accession process hinges upon receiving the closing benchmarks for chapters 23 and 24.
During a recent visit to Brussels, the new Prime Minister Abazović outlined an agenda of the priority reforms, also hinting that there is a political climate in the EU that would allow Montenegro to make significant progress.
“The most important message is that the doors of the EU are open to Montenegro and that we should not miss this opportunity. My appeal to all political subjects is that we should put the national interest of Montenegro front and center and that we should try to take at least one of the most important decisions by 31 July and that Montenegro receives closing benchmarks during the Czech Presidency, which starts on 1 July. That would be an extraordinary, spectacular situation. There is an enthusiasm in the EU for that, you can feel that energy”, Abazović said.
European Western Balkans interlocutors say that, under favourable circumstances, this goal is realistic.
“If there really is a political will to accomplish the EU integration-related tasks – I believe it is realistic. Montenegro has been negotiating for 10 years now – this means that probably everyone in the country, and particularly among politicians and officials, knows the requirements. Depending on the political will, but also political stability, these requirements could be rapidly fulfilled”, says Ana Đurnić, a public policy researcher at Institute Alternative and a member of the Working Group for Negotiating Chapter 23.
She points out that the recently prepared non-paper for chapters 23 and 24, drafted by the European Commission and covering the period since October 2021, noted that “work has clearly intensified following the long-awaited finalisation of appointments to administrative structures in the area of rule of law”.
This is a signal, Đurnić says, that the EU appreciates positive developments in the field, but also notices the lack of it in some areas, such as the work of the Agency for prevention of corruption which still faces shortcomings in its decision-making.
Đurnić also noted that Montenegro is still more advanced in Chapter 24 compared to Chapter 23, mostly due to the fact that this Chapter is more focused on the “external factors and actors”, such as crime and organised groups, while Chapter 23 is more “self-regulatory”, since the progress in this Chapter clearly depends on building institutions, mechanism and laws which strongly interfere with the political interest of the parties.
Gordana Đurović, Professor at the Faculty of Economics and Faculty of Political Science University of Montenegro, agrees that Abazović’s plan could be achieved with some positive signals from Brussels and “good wind” at home.
She also notes that the non-paper received in May is much better than the EC report in October 2021 with a few important marks, including the “record of drug seizures”, the “appointment of the Prosecutorial Council, a new acting Supreme State Prosecutor and a new Chief Special Prosecutor”, as well as the fact that “the former President of the Supreme Court was arrested on charges of suspected abuse of office and of creating a criminal organisation”,
“Numerous processes in this area are ongoing and it is the base for Abazović’s optimism”, Đurović says.
However, she stresses that a number of appointments in the judiciary are still pending, including members of the Judicial Council, a permanent Supreme State Prosecutor and three judges of the Constitutional Court, which require a parliamentary majority.
A solid track record in the area of high-level corruption and results in the fight against organized crime is also the challenge for this transitional governance arrangement in Montenegro”, Đurović adds.
It is these issues that are still polarising the current environment in the country. Members of the Democratic Front and the Democrats, who supported the previous government of Zdravko Krivokapić, have been vocal about the fact that Abazović’s Government is supported by the Democratic Party of Socialists (DPS), led by country’s President Milo Đukanović. DPS, which ruled Montenegro uninterruptedly from 1990 to 2020, is still being accused of major corruption scandals that took place in that period.
During the Prime Minister question time last week, one of the leaders of the Democratic Front Andrija Mandić asked Prime Minister Abazović “why the fight against organised crime has ceased” and “why the members of the mafia-cratic government are no longer put behind bars”.
Abazović responded that he was very satisfied with what has been achieved in the past month and the past year and that the “hand of justice has started operating”. He said that the EU officials in Brussels were particularly surprised that some of the highest members of the judicial branch of government had been arrested, which is a “very good message”.
“As far as I am concerned, no pressure, at any time, can disrupt us in what is our goal, and our goal is to fight organized crime and corruption. That’s it, whether someone will support it or not, I can’t get into it, nor do I want to”, Abazović stated.
The fight against organized crime and corruption is expected to remain a hot topic in the public, and the level of preparedness in this area will ultimately be decided by the Council of the European Union. If, as the government hopes, that leads to the closing benchmarks for chapters 23 and 24, the roadmap for closing other negotiating chapters, which are now organised into clusters, is clear, says Professor Gordana Đurović.
“In that case, the Government plan is the following: In the first half of 2023 close clusters II and III; in the second half of 2023 close cluster V. In the first half of 2024 close cluster IV, and in the second half of 2024 close the remaining clusters I and VI. Finally, during the second half of 2024, the negotiations in Chapters 34 and 35 should be also completed.”, Đurović says.
She adds that, at the same time, certain deviations from this plan are possible because the new methodology does not prescribe the obligation to close the chapter in a cluster.
“If Montenegro does not take advantage of this small window of opportunity related to the EU Agenda 2025, a Western Balkan convoy waits for us with all the risks that delaying the integration process carries, especially security, political and economic ones”, Đurović concludes.
Author: Aleksandar Ivković, European Western Balkans
The Draft Law on Amendments to the Law on Public Procurement is making steps towards simplifying procedures and clarifying legal provisions that could and/or have been so far subject to different interpretations in use. While praising such procedural improvements, we note that these amendments lack reform zest, for which we have also seen the need in practice.
Therefore, at the very beginning, we will repeat the key problems that we have noticed so far in our research in the field of public procurement and for which we believe should be the subject of reforms (through amendments to the Law and/or bylaws), and which are largely compatible with SIGMA recommendations and findings in this area.
The need to prepare and adopt a special Law on Procurement in the Security and Defence Sector, which would respond to all the specifics of these procurement, in terms of planning, implementation, reporting, and supervision of the implementation of these procurement.
It is necessary to determine more stringent obligations of contracting authorities in the preparation of the Public Procurement Plan. The Plan should also include the contracting authority’s needs assessment for the previous three years, an explanation if drastic differences exist in the planned needs compared to previous ones for the same procurement, as well as a specific explanatory notes on any new procurement. Amendments to Public Procurement Plans should include mandatory explanation of the changes.
The Law on Public Procurement should prescribe the obligation of conducting market analysis and the relevant procedure, as well as the obligation of reporting on the conducted market analysis, to allow for equal treatment of all interested bidders, including those market actors who did not take part in the consultations but are interested in taking part in the public procurement procedure. The secondary legislation should stipulate mandatory content of the template of the Report on Conducted Public Consultations.
The Law on Public Procurement should prescribe the obligation of the Ministry of Finance to prepare a Methodology for defining the criteria “economically most advantageous bid”, since the price is still a key factor in choosing the most advantageous bid, as the most frequently used sub-criteria in a very high percentage of total points. SIGMA attributes this primarily to the weak capacity of contracting authorities to better define the most economically advantageous bid, so a binding and detailed Methodology/Rulebook, in addition to the existing Rulebook on Methodology for Evaluating Bids in Public Procurement (074/20), should issue rules for determining criteria, but also examples of the certain sub-criteria and models of bid evaluation. Eventually, to amend the existing Rulebook on the Methodology for Evaluating Bids.
It is necessary to amend the template of the Report on the performance of public procurement contracts, so that it must contain: • data on the execution of contracts for procurement of goods, services and works on all essential characteristics of the subject of procurement (quality, dimension, shape, safety, performance, labelling, expiration date, measurement unit, quantity, etc.) and requirements regarding the manner of execution of the subject of procurement, including any requirements related to environmental protection, energy efficiency, social protection and / or protection and transfer of intellectual property rights, as stated in the the technical specification of the selected bid, as the basis for the contract; (Article 87 of the Law on Public Procurement, requirements regarding the implementation of the subject-matter of procurement and requirements regarding the execution of works – Article 89 of the Public Procurement Law); • data on deadlines and methods of payment, with accompanying supporting documentation; evidence of acceptance of goods (delivery note signed by an authorised person), delivery of services or execution of works (proof of the existence of the final product, photo and/or video documentation, report of the legal person in charge of supervising the implementation of works); Also, the report should contain a conclusion on whether the contract was executed in full compliance with the contract (and amendments to the contract – concluded annexes); if not, the report must contain information on whether the appropriate procedure has been initiated to compensate and remedy any harmful consequences of non-execution of the contract. The report should also contain the signature of the responsible person so that all the information stated in the report is correct.
Improve legislation in the area of conflicts of interest in public procurement, by considering the model of involving the Agency for Prevention of Corruption and networking of databases at its disposal with the Montenegrin Electronic Public Procurement System (CEJN). This to enable contracting authorities to automatically access databases so that they can perform adequate verification of the accuracy of statements on the absence of conflicts of interest (prevention), and involve the Agency in the part of the investigation into the already existing conflict of interest (repression). It is necessary to introduce the obligation to publish statements on (non)existence of conflicts of interest of all persons involved in the public procurement procedure in the Electronic Public Procurement Gazette. Also, compiling and publishing, with regular updating, the lists of business entities with which the heads of the contracting authority may not conclude a contract due to the existence of a conflict of interest, that is a certain private interest, which in addition to Croatia, also exists in Bosnia and Herzegovina.
Our comments concerning the Draft Law on Amendments to the Law on Public Procurement submitted during the public debate can be found at the link below:
We have sent proposals to MPs to intensify oversight activities, reminding them that most of the committees have not yet adopted annual activity plans, while they failed to discuss important reports, including the semi-annual report of the police director on the fight against organised crime.
Reiterating the relevance of our last year’s proposals, we pointed out to MPs the importance of their role in monitoring negotiations with the European Union (EU), especially considering the promise of the recently formed Government to intensify workload to meet the EU’s conditionality. The previous Government also adopted an Action Plan to address the recommendations from the 2021 Montenegro Report of the European Commission, but it failed to involve Parliament in its adoption and monitoring.
Recent affairs and allegations that high-ranked public officials were involved in organised crime and corruption require a systematic response and insight into the functionality of internal control mechanisms (General Inspector in the Agency for National Security and Internal Police Control). That is why we called the Anti-Corruption Committee and the Security and Defence Committee to organise joint control hearings and to contribute to shedding a light on evolving corruption scandals and weaknesses of existing internal control mechanisms, which were obviously not effective enough to prevent the worrisome links between organised crime and public officials.
We have also urged the Security and Defence Committee to consider the police report on the fight against organised crime and corruption, which is long overdue, and to seek additional clarifications, especially in the light of the most recent reports which have showcased the level of infiltration of certain organised criminal groups into the security and judiciary sectors.
We have reminded MPs that the reports on the work of judiciary, including the Prosecutorial and the Judicial Councils, have been submitted to the Parliament. We hope that this time MPs will discuss these reports in a more detailed way and that they will offer conclusions and recommendations depending on the information presented in the reports.
In line with our previous recommendations, we believe that the more active role of the committees and the Parliament in monitoring the in-year budget execution is an imperative of more efficient parliamentary oversight. Considering that the ambitious reform called “Europe Now” came into force this year, the responsibility of MPs to get involved in the timely monitoring of budget execution is even greater.
Control and consultative hearings should also encompass subjects and policies, addressed by important reforms, planned laws and recently adopted strategies. We have thus invited MPs to get involved in analysing and regulating the position of the Protector of Property Interests, conflicts of interest in public procurement, security and defence procurement, implementation of the Public Administration Reform Strategy and Ombudsman’s recommendations, resolution of complaints of candidates for public office, and use of early integration measures into the European Union (EU) to promote gender equality.
At the end of 2021 we have published five monitoring reports:
In order to bring the process of gender mainstreaming closer to civil servants working on the design and implementation of strategic planning, on April 8 in Kolašin, we held a training ”Strategic Planning for Gender Equality”.
Project Coordinator, Nikoleta Pavićević, said that the training was intended primarily for officials who attended the Education Program for Professional Development of Civil Servants for Strategic Planning, and that it is an effort of the Institute Alternative to upgrade existing knowledge and skills in this area.
During the Training, the participants had the opportunity to learn about:
Gender Mainstreaming Tools and their application in practice;
Gender Statistics and Gender Analysis in Strategic Planning;
Gender Analysis in sectors;
Formulating Gender-Responsive and transformative strategy objectives.
The training brought together 16 participants working on strategic planning, who had the opportunity to gain knowledge about gender mainstreaming as an approach in creating, implementing, monitoring and evaluating public policies. Višnja Baćanović, an expert in this field, led the training by combining a theoretical approach and working in groups on existing strategies, such as the Smart Specialization Strategy.
As the most useful training modules, participants in the evaluations highlight:
”Gender statistics and gender analysis, interactive approach throughout the Training and shared experiences and examples”; as well as ”defining the gender dimension when setting strategic goals”.
Civil servants from the Ministry of Health, Ministry of Agriculture, Forestry and Water Management, Ministry of Economic Development, Ministry of Ecology, Spatial Planning and Urbanism, Ministry of Justice, Human and Minority Rights, Ministry of Public Administration, Digital Society and Media, Ministry of Education, Science, Culture and Sports, Human Resources Management Authority and the Office for European Integration – have successfully completed the training on gender mainstreaming of strategic planning.
The training was organized by the Institute Alternative, within the project ”Empowered: Public Policies for Gender Equality”, which we are implementing with the support of the Ministry of Justice, Human and Minority Rights of Montenegro.
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“Governments need to have good people who work in civil service, and they need to make sure that the career of the civil servant is attractive to people,” said Florian Hauser. “If we don’t deliver, if we don’t provide services to citizens and businesses, then we are not relevant anymore. Better public administration works – the country will be more successful”, he added.
Participants then shared experiences from the implementation of the Integrity Risk Assessment methodology in the central public institutions of Albania, why it is necessary to have a code of ethics in public institutions and why we have to pay attention to administrative leadership, not only to political leadership. Also, representatives from the region talked about their own perspectives on integrity-building experiences in the public administrations of the Western Balkans.
“If there really is a political will to accomplish the EU integration-related tasks – I believe it is realistic. Montenegro has been negotiating for 10 years now – this means that probably everyone in the country, and particularly among politicians and officials, knows the requirements. Depending on the political will, but also political stability, these requirements could be rapidly fulfilled”, says Ana Đurnić, a public policy researcher at Institute Alternative and a member of the Working Group for Negotiating Chapter 23.
Recent affairs and allegations that high-ranked public officials were involved in organised crime and corruption require a systematic response and insight into the functionality of internal control mechanisms (General Inspector in the Agency for National Security and Internal Police Control). That is why we called the Anti-Corruption Committee and the Security and Defence Committee to organise joint control hearings and to contribute to shedding a light on evolving corruption scandals and weaknesses of existing internal control mechanisms, which were obviously not effective enough to prevent the worrisome links between organised crime and public officials.
